Cemex 2012 Annual Report Download - page 44

Notes to the
consolidated
financial
statements
44
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Statements of operations
In CEMEX’s statements of operations for the years ended December 31, 2012, 2011 and 2010, the line item currently titled
“Operating earnings before other expenses, net” was previously titled “Operating income,” and the line item currently titled
“Operating earnings” was previously titled “Operating income after other expenses, net.” CEMEX made these changes to comply
with industry practice when filing financial statements under IFRS with the SEC based on the guidance set forth in paragraph
56 of the Basis for Conclusions of IAS 1, Presentation of Financial Statements (“IAS 1”). However, such changes in line-item titles
do not represent any change in CEMEX’s accounting practices, policies or methodologies under IFRS as compared to prior years.
Consequently, the line item “Operating earnings before other expenses, net” is directly comparable with the line item “Operating
income” presented in prior years and the line item “Operating earnings” is directly comparable with the line item “Operating income
after other expenses, net” presented in prior years.
The line item “Other expenses, net” in the statements of operations consists primarily of revenues and expenses not directly
related to CEMEX’s main activities, or which are of an unusual and/or non-recurring nature, including impairment losses of long-
lived assets, results on disposal of assets and restructuring costs, among others (note 6).
Statements of other comprehensive income (loss)
For the years ended December 31, 2012, 2011 and 2010, CEMEX adopted amendments to IAS 1, which, among other things,
require entities to present line items for amounts of other comprehensive income (loss) in the period grouped into those that, in
accordance with other IFRSs: a) will not be reclassified subsequently to profit or loss; and b) will be reclassified subsequently to
profit or loss when specific conditions are met.
Statements of cash flows
The statements of cash flows present cash inflows and outflows, excluding unrealized foreign exchange effects, as well as the
following transactions that did not represent sources or uses of cash:
• In 2012, the exchange of approximately US$452 (48%) of CEMEX’s then outstanding perpetual debentures and of
approximately €470 (53%) of CEMEX’s then outstanding Euro-denominated 4.75% notes due 2014, for new Euro-
denominated notes for €179 and new Dollar-denominated notes for US$704. In 2011, the exchange of a portion of CEMEX’s
perpetual debentures for new notes for US$125, and in 2010, the exchange of a portion of CEMEX’s perpetual debentures
for new notes for US$1,067 and new notes for €115 (note 16A). These exchanges represented net increases in debt of
$4,111 in 2012, $1,486 in 2011 and $15,361 in 2010, reductions in equity’s non controlling interest of $5,808 in 2012,
$1,937 in 2011 and $20,838 in 2010 and increases in equity’s controlling interest of $1,680 in 2012, $446 in 2011 and
$5,401 in 2010;
• In 2012 and 2011, the increases in property, plant and equipment for approximately $2,025 and $1,519, respectively, and
in debt for approximately $1,401 and $1,558, respectively, associated with the negotiation of capital leases during the year
(note 16B);
• In 2011, the increase in debt for $1,352 related mainly to the acquisition of Ready Mix USA LLC (note 15B);
• In 2011, the decrease in debt and in perpetual debentures within non-controlling interest for approximately $239 and
$1,391, respectively, in connection with the gains resulting from the difference between the notional amount and the fair
value of CEMEX’s debt and perpetual instruments held by subsidiaries (note 16A); and
• In 2012, 2011 and 2010, the increases in common stock and additional paid-in capital associated with: (i) the capitalization
of retained earnings for $4,138, $4,216 and $5,481, respectively (note 20A); and (ii) CPOs issued as part of the executive
stock-based compensation for $486, $495 and $312, respectively (note 20A).
2B) Principles of consolidation
According to IAS 27, Consolidated and separate nancial statements (“IAS 27”), the consolidated financial statements include
those of CEMEX, S.A.B. de C.V. and the entities in which the Parent Company holds, directly or through subsidiaries, more than
50% of their common stock and/or has control. Control exists when CEMEX, S.A.B. de C.V. has the power, directly or indirectly, to
govern the administrative, financial and operating policies of an entity in order to obtain benefits from its activities. The financial
statements of Special Purpose Entities (“SPEs”) are consolidated if, based on an evaluation of the substance of the agreements
and the SPE’s risks and rewards, CEMEX concludes that it controls the SPE. Balances and operations between related parties are
eliminated in consolidation.